4.—(1) For the purposes of section 34 (which relates to relief in respect of certain losses) of the Income Tax Act, 1918, the amount of a loss sustained in a trade shall, in all cases (but subject to the provisions of the next following sub-section of this section) be computed in like manner as the profits or gains arising or accruing from the trade are computed under the Rule applicable to Case I of Schedule D of the said Act and the Rules applicable to Cases I and II of that Schedule.

(2) The provisions of the foregoing sub-section of this section shall not override or affect the provisions of paragraph (2) (which relates to losses of assurance companies carrying on life assurance business) of Rule 15 of the Rules applicable to Cases I and II of Schedule D of the Income Tax Act, 1918.